NHS gets £20bn 'birthday present'

Extra funding for the NHS in England has been announced by ministers who are calling it a 70th “birthday present”.

The PM told the BBC’s Andrew Marr Show the boost will partly be funded by a “Brexit dividend” that will arise once the UK stops EU payments.

The spending plan means the £114bn-a-year budget will rise by over 3% a year on average in the next five years.

That will mean by 2023 the budget will be £20bn a year more than it is now once inflation is taken into account.

But crucially the plan just covers frontline budgets overseen by NHS England.

About a tenth of the overall health budget is held by other bodies for things such as training and healthy lifestyle programmes, including stop smoking services and obesity prevention programmes.

The BBC understands these will be protected, but beyond that it is unclear what will happen to them.

The 2015 spending review – the last time a five-year settlement was announced – saw these budgets cut to help pay for an £8bn increase in NHS England’s budget.

The deal has been reached after a series of meetings between the chancellor and Health Secretary Jeremy Hunt and NHS England chief executive Simon Stevens in recent weeks.

They had been locked in negotiations after Prime Minister Theresa May promised there would be a long-term settlement agreed this year.

In her BBC interview she said the increase will exceed the £350m-a-week extra promised by Leave campaigners during the EU referendum campaign.

‘Superhuman efforts’

With the NHS celebrating the 70th anniversary of its creation in July, there had been a desire to see something announced before then.

Mr Hunt said this had been achieved, giving the NHS a “fitting birthday present for our most loved institution”.

He added: “It recognises the superhuman efforts made by staff over the last few years to maintain services in the face of rapidly growing demand. But it also presents a big opportunity for the NHS to write an entirely new chapter in its history.”

The announcement means extra money will also be made available for Scotland, Wales and Northern Ireland, although it will be up to the Welsh and Scottish governments to decide how that is spent.

Is this being paid by the Brexit dividend?

Alongside the five-year funding plan, ministers are expected to announce a new 10-year vision will be drawn up for the health service.

Details of this and how it will be carried out are expected to come in a speech by Prime Minister Theresa May on Monday.

But in her BBC interview, to be aired on Sunday, Mrs May claimed the funding boost is partly coming from a “Brexit dividend”.

“Some people may remember seeing a figure on the side of a bus a while back of £350m a week in cash,” she said.

“I can tell you that what I’m announcing will mean that in 2023-24 there will be about £600m a week, more in cash, going into the NHS.

“That will be through the Brexit dividend. The fact that we’re no longer sending vast amounts of money every year to the EU once we leave the EU.”

But Mrs May also acknowledged that “as a country” more will need to be contributed.

She did not spell out that would require tax rises, although a recent report by the Institute for Fiscal Studies said they would be needed as it was hard to imagine the money could be found from economic growth or raiding other areas of government spending.

Analysis: By Alex Forsyth, BBC Political Correspondent

It was one of the most contentious pledges of the Vote Leave campaign: a claim emblazoned on the side of the Brexit battle bus that leaving the EU would mean an extra £350m a week for the NHS.

The figure was widely discredited, but Theresa May has deliberately raised it again – suggesting this funding package will more than meet the campaign promise.

Not all of the extra NHS cash will come from the so-called Brexit dividend; there will be tax rises too. But in linking the funding to leaving the EU, the prime minister is not only trying to prove her commitment to the health service – but to Brexit as well.

That will no doubt please those in her party pushing for a clean break from Brussels; but may anger those seeking to retain close ties with the EU. The prime minister is once again walking the tightrope of divided Tory opinion.

Is this more than expected?

There has been a lot of speculation that Mr Hunt – supported by Mr Stevens – had been pushing for close to 4% a year extra.

This was the figure many in the health service had said was needed to get services back on track and to improve waiting times.

Reports have suggested the Treasury were initially offering less than 3%.

So the 3.4% average appears to be a compromise between the two camps – and is close to the 3.7% average increase the NHS has seen if you look back over the last 70 years.

The final picture is somewhat clouded by the lack of clarity about what will happen to the wider health budget.

What it does mean is that the five-year funding plan announced in 2015, which was meant to see the budget increase by £8bn above inflation by 2020, has been effectively ended two years early.

And that comes after ministers agreed in autumn 2017 to top that up by another £2.8bn.

‘Don’t forget social care’

Ian Dalton, head of NHS Improvement, a regulator in charge of monitoring performance in the health service, said: “This settlement is good news for the NHS, those who use it and those who work for it.

“It will enable the dedicated staff in our NHS to go on improving the care we can offer the patients.”

But Chris Hopson, chief executive of NHS Providers, which represents NHS trusts, said the settlement was the “minimum” that was needed.

“After almost a decade of austerity, the NHS has a lot of catching up to do.”

He also pointed out that the government needed to work out what it was going to do about social care run by councils.

Ministers have promised the system, covering care homes and help at home, will be reformed soon to ensure there is better access to services.

Niall Dickson, chief executive of NHS Confederation, which represents healthcare organisations, said the funding rise was a “significant improvement” but fell short of the 4% extra-a-year figure an independent report had suggested was needed.

“The truth is that in spite of this welcome extra investment we will face hard choices and we need an honest debate about what the NHS can and cannot do,” he said.

“One danger is that it simply goes to prop up the existing system, which will certainly not be able to cope – even with this injection.”